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Verizon wins, Net neutrality loses, as court ruling opens door to a tiered Internet 

A green connector on a Verizon fiber optic cable is ready for an apartment renter to plug into for phone, cable and internet service at the 67 Wall St...
A green connector on a Verizon fiber optic cable is ready for an apartment renter to plug into for phone, cable and internet service at the 67 Wall Street luxury apartment building on March 7, 2007 in New York. Verizon is pushing to get FiOS to apartment buildings, rowhouses and other shared dwellings, but for a number of reasons, the going is much slower than the rollout to single-family homes. (AP Photo/Mark Lennihan)Mark Lennihan / AP file
Mark Lennihan / AP file

Telecom companies won a victory in the battle over "Net neutrality" Tuesday after a U.S. appeals court invalidated regulations from the FCC that banned carriers from favoring traffic from certain sources. 

Those FCC rules were meant to force broadband providers to treat all Internet traffic equally — essentially making it impossible for them to charge companies for a faster route into people's homes. 

The FCC's "Open Internet Order" has long been supported by President Barack Obama, who, according to a 2010 White House statement, was "strongly committed to Net neutrality in order to keep an open Internet that fosters investment, innovation, consumer choice, and free speech."

Now, the door is open for companies like AT&T, Verizon, Sprint and T-Mobile to create a tiered Internet, where those who can pay the most can utilize the fastest connections, while others are stuck transmitting information at slower speeds. A ban on completely blocking certain Internet traffic sources was also overturned. 

How did the court come to its decision? Ruling for Verizon, it said that the FCC couldn't impose those regulations because it failed to classify broadband providers as "common carriers," which are private companies that provide infrastructure services that are easily monopolized — for example, telephone or power companies. 

The FCC, however, classified broadband providers as "information services," like Google and other Internet companies, which are subject to less stringent regulations.

Thanks to that distinction, the court ruled that the FCC had overstepped its authority with the Open Internet Order, a decision that FCC Chairman Tom Wheeler disagrees with.

In a statement released Tuesday, Wheeler said he agreed instead with a previous ruling that the FCC has "authority to enact measures encouraging the deployment of broadband infrastructure" and that the agency would "consider all available options, including those for appeal, to ensure that these networks on which the Internet depends continue to provide a free and open platform for innovation and expression, and operate in the interest of all Americans.” 

Keith Wagstaff writes about technology for NBC News. He previously covered the tech beat for TIME's Techland and wrote about politics as a staff writer at TheWeek.com. You can follow him on Twitter at @kwagstaff and reach him by email at: Keith.Wagstaff@nbcuni.com